(Feb-18) Following a US holiday, there weren’t significant movements in currencies, with the dollar index closing 0.21% lower but has made some inroads, now trading at 106.98.
Optimism around China increased after a meeting between Xi Jinping and corporate leaders, including Jack Ma, suggesting a potential end to the crackdown on the private sector. Chinese shares have surged by over $1 trillion since DeepSeek’s AI breakthrough.
In commodities, oil prices steadied as OPEC+ considered delaying output restoration, and Ukrainian drones attacked a Russian crude-pumping station.
Gold maintained its gains, with a year-end target of $3,100 an ounce due to central-bank buying and ETF inflows.
The euro appears vulnerable to further losses against the dollar, influenced by short-term rates and geopolitical risks. Political concerns in Europe, including increased defense spending and upcoming German elections, may further strain the euro.
Against the crosses:
(Feb-13) CPI print yesterday supported FEDs decision to hold rates steady and the general talks between US and Rassia to end the war has boosted risk sentiments.
(Feb-17) We saw a general USD weakness on Friday across the board which was related to various factors and optimism around de-escalating geopolitical risks, this however is still not yet confirmed.
(Feb-10) SA’s Finance Minister, Enoch Godongwana, will deliver the 2025 Budget Speech on Wednesday, February 19th. The speech will outline the government’s financial, economic, and social commitments for the year, focusing on balancing economic growth with support for vulnerable communities.
(Feb-17) Volumes improved towards the end of the week, with 3 days trading higher that the recent ADV.
(Feb-18) Pull back in volumes due to US holiday on Monday.
(Feb-13) Clients ended yesterday being net-short ZAR: - Range for today: 18.60 - 18.30.
(Feb-17) Saw the market reject the move lower in ZAR, with implied topside at 18.65.
(Feb-10) Clients are now net-long USDZAR.
(Feb-11) We see continued net-long positions in ZAR.
(Feb-14) ZAR not showing any trend for now:
(Feb-17) Saw the market reject the move lower in ZAR, however the the weaker USD on Friday (Feb-14) saw ZAR hitting lows of 18.2995.
(Feb-18) ZAR made the expected correction yesterday to 18.45. Given that we failed to break above 18.50, a move lower but above 18.30 is likely.
(Feb-17) Volumes muted today as its a US holiday.
(Feb-18) Rand shows zero interest of making moves today, we remain at that rand volume weighted price of 18.40.
By Thuto Mukena - Institutional Sales Specialist (Feb-18)
Yesterday, the morning bid tone in implied vols faded quickly, despite weaker momentum in the Rand, as market focus shifted to Finance Minister Godongwana’s upcoming Medium-Term Budget Policy Statement on Wednesday. The move lower in the ZAR wasn’t entirely local-driven, with broader weakness observed across the EM spectrum, led by the Chilean Peso. Despite the selloff and the approaching budget statement, local implied vols were offered, with 1-week USD/ZAR implied vol dropping by 1.43 vol p.p from the open. The 1-week volatility risk premium also narrowed below its 1-week average as market participants continue adjusting future vol expectations lower ahead of this week risk events.
With U.S. markets closed for Presidents’ Day, the dollar maintained a strong stance across most pairs, while peace talk headlines remained in the background. Despite the uncertainty, the implied vol market continues to price in calmer conditions ahead. In the G10 space, USD/JPY and EUR/USD 1-week implied vols edged lower, closing 75bps and 70bps below opening levels. High-beta EM vols followed suit, with USD/BRL and USD/MXN 1-week implied vols dropping 82bps and 41bps, respectively, by session end.
By sizwe Mfayela - Institutional Sales Specialist (Feb-14)
Egypt
Kenya
Ivory Coast
Nigeria
Rwanda
Senegal
Zimbabwe
Eurobonds
NGERIA
ANGOL: Locals sold into ETF and street bids
IVYCST: Flows were relatively light, but overall turned two-way, with the bid for the $ bonds on the curve going softer.
KENINT: Some fiscal-related headlines yesterday but flows were muted, with locals net sellers of risk to add to the real money account selling.
SENEGL: Was very much in price discovery in a 3pt range since the headlines hit on Wednesday as bid and offers felt very skittish, forcing swift repricing on each print. Overall, SENEGL underperformed on the day with the curve bear flattening.
SOAF: An active session with headlines keeping flows on the curve two-way. US PPI came out higher than expected - after a higher-than-consensus CPI print yesterday - but that softened the bid only for a split second. Real money and ETFs were net buyers of risk, whilst there was selling from the street. Long-end continued to trade better, with front-end bonds catching a bid.
Economic data releases